Thursday, February 28, 2013

Trinidad & Tobago keeps rate steady on contained inflation

The central bank of Trinidad and Tobago held its benchmark repo rate steady at 2.75 percent, saying its current accommodative policy stance was appropriate in light of contained inflationary pressures and the expectation that economic activity will improve in 2013.
The Central Bank of Trinidad & Tobago, which cut its rate by 25 basis points in 2012, said headline inflation rose by 7.3 percent in January, slightly above December's 7.2 percent with food inflation up an annual 13.8 percent from 12.7 percent due to faster price increases for most food and vegetables.
The core inflation rate eased to a 2.2 percent rate in January from December's 3.1 percent.
Private sector credit slowed down unexpectedly towards the end of 2012 after a slow but steady rise earlier in the year with the growth rate down to 2.1 percent in December from 3.8 percent in November and a 0.8 percent fall in business lending following a 2.6 percent rise in November.
"With underlying inflationary pressures still well contained and continuing
expectation for a turnaround in economic activity in 2013, the Bank views its
present accommodative monetary stance as appropriate," the central bank said. Last month the governor of the central bank said he was cautiously optimistic for 2013 and forecast economic growth of 2.5 percent.
Trinidad & Tobago's Gross Domestic Product contracted by an annual 1.79 percent in the second quarter of 2012, wider than the 0.49 percent contraction in the first quarter.